Forty members of Congress on Monday asked the IRS and the Treasury to investigate what the lawmakers termed an “alarming pattern” of right-wing advocacy groups registering with the tax agency as churches, a move that allows the organizations to shield themselves from some financial reporting requirements and makes it easier to avoid audits.
Reps. Jared Huffman, D-Calif., and Suzan DelBene, D-Wash., raised transparency concerns in a letter to the heads of both agencies following a ProPublica story about the Family Research Council, a right-wing Christian think tank based in Washington, D.C., getting reclassified as a church. Thirty-eight other lawmakers, including Reps. Adam Schiff, D-Calif., Debbie Wasserman Schultz, D-Fla., Rashida Tlaib, D-Mich., and Jamie Raskin, D-Md., signed onto the letter.
“FRC is one example of an alarming pattern in the last decade — right-wing advocacy groups self-identifying as ‘churches’ and applying for and receiving church status,” the representatives wrote, noting the organization’s policy work supporting the overturning of Roe v. Wade and its advocacy for legislation seeking to ban gender-affirming surgery.
“Tax-exempt organizations should not be exploiting tax laws applicable to churches to avoid public accountability and the IRS’s examination of their activities,” they wrote.
The Family Research Council did not respond to requests for comment. The IRS told ProPublica that it does not comment on congressional correspondence.
The FRC’s website describes the organization as “a nonprofit research and educational organization dedicated to articulating and advancing a family-centered philosophy of public life,” noting that it provides “policy research and analysis for the legislative, executive, and judicial branches of the federal government.”
The FRC sought and received reclassification from a standard tax-exempt charity to an “association of churches” in 2020.
In its application for church status, the organization said it met 11 of the 14 characteristics that the IRS uses to determine whether an organization is a church, including an established place of worship — a chapel in the organization’s Washington office building, at which it said it holds services attended by more than 65 people. (Someone who answered the phone at the office said the group doesn’t offer church services.) The organization said its association comprises nearly 40,000 “partner churches” that must affirm a statement of faith to join; it did not offer the names of those partners on its form to the IRS or provide them to ProPublica.
The representatives’ letter asks the IRS to review the FRC’s status change and to examine its review process for organizations similarly seeking to switch their status to become a church or association of churches.
“It’s disturbing that a letter like this is even necessary,” Huffman said. “Unfortunately our IRS has been so worn down and beaten up by the right wing that they have essentially ceased all scrutiny of organizations that self-report as churches.”
The IRS classifies churches and associations of churches as tax-exempt charitable organizations, meaning that they do not have to pay federal taxes and that donors can deduct contributions from their own taxes. However, churches are exempt from submitting Form 990, the annual financial disclosure that nonprofit organizations use to list board members, key staffer salaries, large payments to independent contractors and grants given by the organization.
And unlike for other tax-exempt organizations, a high-level Treasury official must sign off on any audit of a church.
“We understand the importance of religious institutions to their congregants and believe that religious freedom is a cherished American value and constitutional right. We also believe that our tax code must be applied fairly and judiciously,” Huffman and DelBene wrote.
In their letter, the representatives asked for feedback from the IRS on whether it needs additional direction from Congress to enforce rules surrounding tax-exempt organizations and churches. Huffman said that he hopes to pursue legislative action if the IRS isn’t able to address these concerns, but that the letter is a first step.
“You need to start here — give the agency a chance to clean up its mess,” he said.